Correlation Between China Mengniu and Scottie Resources
Can any of the company-specific risk be diversified away by investing in both China Mengniu and Scottie Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Mengniu and Scottie Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Mengniu Dairy and Scottie Resources Corp, you can compare the effects of market volatilities on China Mengniu and Scottie Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Mengniu with a short position of Scottie Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Mengniu and Scottie Resources.
Diversification Opportunities for China Mengniu and Scottie Resources
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Scottie is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding China Mengniu Dairy and Scottie Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottie Resources Corp and China Mengniu is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Mengniu Dairy are associated (or correlated) with Scottie Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottie Resources Corp has no effect on the direction of China Mengniu i.e., China Mengniu and Scottie Resources go up and down completely randomly.
Pair Corralation between China Mengniu and Scottie Resources
Assuming the 90 days horizon China Mengniu Dairy is expected to under-perform the Scottie Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, China Mengniu Dairy is 1.7 times less risky than Scottie Resources. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Scottie Resources Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Scottie Resources Corp on September 2, 2024 and sell it today you would lose (2.00) from holding Scottie Resources Corp or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Mengniu Dairy vs. Scottie Resources Corp
Performance |
| Timeline |
| China Mengniu Dairy |
| Scottie Resources Corp |
China Mengniu and Scottie Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Mengniu and Scottie Resources
The main advantage of trading using opposite China Mengniu and Scottie Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Mengniu position performs unexpectedly, Scottie Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Scottie Resources will offset losses from the drop in Scottie Resources' long position.| China Mengniu vs. The A2 Milk | China Mengniu vs. Artisan Consumer Goods | China Mengniu vs. General Mills |
| Scottie Resources vs. HUMANA INC | Scottie Resources vs. SCOR PK | Scottie Resources vs. Aquagold International | Scottie Resources vs. Thrivent High Yield |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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